On May 31, 2017, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration and Office of the Comptroller of the Currency (collectively herein, the “agencies”), jointly issued an advisory (click here) to inform insured depository institutions and bank holding companies (collectively herein, the “regulated institutions”) of two existing options that may address appraiser shortages, particularly in rural areas: temporary practice permits and temporary waivers. In summary, the advisory provides as follows: Temporary Practice Permits The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) requires a state appraiser agency that certifies or licenses appraisers to recognize the certification or license of an appraiser issued by another state on a temporary basis for federally related transactions if the appraiser registers with the state agency (12 U.S.C. 3351(a)). FIRREA also prohibits the state agency from imposing excessive fees or burdensome requirements for the temporary practice permitted by FIRREA. This will allow state certified or licensed appraisers to provide temporary appraisal services in states where they are not certified or licensed, including those experiencing a shortage of appraisers. Temporary Waivers FIRREA authorizes the Appraisal Subcommittee (ASC) of the Federal Financial Institution Examination Council (FFIEC), after making certain findings and with the approval of the FFIEC, to grant temporary waivers of any requirement relating to certification or licensing of individuals to perform appraisals in states or geographic political subdivisions of any states where there is a shortage of appraisers leading to significant delays in obtaining appraisals in connection with federally related transactions (12 U.S.C. 3348(b)). If a temporary waiver is granted, the requirement to use a certified or licensed appraiser on federally related transactions would be waived for all regulated institutions engaging in federally related transactions in the affected geographic area, regardless of who initially requested the waiver. We advise the regulated institutions interested in the appraisal options summarized above to read the Interagency Advisory hyperlinked to this memorandum.
